CWA and AT&T reach contract deals

Workers at two AT&T bargaining units ratified a new contract. Another AT&T bargaining unit has reached a tentative agreement. The company sought steep concessions similar to the ones that Verizon is demanding, but the new contracts provide a modest raise, keep the workers pension plans intact, provide some job security, and maintain other benefits won by hard struggle over the last 50 years.

Workers, however, will see their health care premiums increase significantly during the three years of the new contracts, which expire in 2015, and new hires will pay a much higher share of health care costs until they have worked two years for the company

About 15,000 wireline workers for AT&T Midwest and about 5,500 workers for AT&T Legacy ratified the new agreements on August 17. AT&T Midwest operates in Illinois, Indiana, Ohio, Michigan, and Wisconsin. AT&T Legacy operates nationwide.

Last week, the union representing AT&T Southeast wireline workers and the company reached a tentative agreement similar to the one ratified by AT&T Midwest and AT&T Legacy.

The AT&T workers are members of the Communication Workers of America.

“In these tough times, our committee was able to get a contract that enhanced both our employment security and our standard of living,” said Linda Horton CWA District 4 (Midwest) vice-president.

Two other AT&T bargaining units are still negotiating new contracts–AT&T West and AT&T East. About 18,000 CWA members in California and Nevada and about 3,200 CWA members in Connecticut are covered by the two contracts. AT&T West and AT&T East workers walked off the job for two days to protest unfair labor practices.

AT&T is one of the most profitable companies in the world. In 2011 it paid shareholders more than $10 billion in dividends and reported net income of $3.9 billion.

In January, it announced that its board of directors had authorized a $300 million buyback of outstanding shares of stock. According to AT&T’s annual report, “our strong cash generation gives us the flexibility to execute these buybacks while maintaining a strong balance sheet.”

Instead of sharing this bounty with its workers, AT&T sought steep concessions from them. CWA was partially successful in turning back these concession demands.

The two ratified contracts and the tentative agreement provide for a 1 percent pension increase for each of the three years of the contract for the traditional defined benefits plan. It also provides for a 1 percent increase in pay credit for workers hired after 2009 covered by the Bargained Cash Balance Plan (not as good as a defined benefit pension but not as bad as a defined contribution plan).

The contracts also provide for across the board pay raises for each year of the contract: 2.5 percent in year one, 2.75 percent in year two, and 3 percent in year three.

While AT&T has been “maintaining a strong balance” sheet it has also been reducing its workforce. The contracts provide some job security improvements. Jobs are guaranteed for the first year of the contract, which ends April 2013, and the guarantee is extended to workers who were not previously protected (those hired after 2006).

But there were some areas where the new contract falls short of what the CWA hoped to accomplish. Workers will pay substantially more for their health care benefit. During the first year of the contract, workers will pay $38 a month for individual coverage and $81 a month for family coverage. By year three, those premiums increase to $79 and $163.

New hires fared even worse. They will have to pay 32 percent of all health care costs for the first two years of employment. After that they will pay the same costs as current workers.

The increased health care costs, concerns about unresolved job responsibilities and classification issues, and a general distrust of AT&T’s motives led to a significant number of workers to reject the contracts.

About one-third of the Legacy workers voted no. No exact figures are available for the Midwest vote count; several reports say only that a majority of workers voted in favor of the contract.

Negotiations are still continuing at AT&T West and AT&T East. On August 7, workers in these bargaining units went on an unfair labor practices strike to protest company harassment and the company’s decision to implement work rule changes without consulting the union.

CWA Local 9423 in Los Angeles reported that “AT&T has violated CWA members’ legal rights and committed (unfair labor practices). In fact, over 20 (unfair labor practices) charges were filed against AT&T by CWA District 9. AT&T thinks that it can break the law and violate our rights, but CWA will not tolerate their disrespectful and blatant violations. Therefore, this (unfair labor practice) strike is the result of AT&T’s actions against CWA members.”

Workers returned to work on August 9 and bargaining between the two sides has continued.


5 thoughts on “CWA and AT&T reach contract deals

  1. What’s a “cash balance” retirement benefit plan? No doubt you’ve explained it before, but I don’t remember. Apparently the union accepted that concession in the last contract.

    CWA Local 6132 here in Austin has posted the District 4 (Midwest) agreement on its website, noting that “Many were curious to see what would get agreed to, since something similar will probably be proposed to District 6 when it goes into negotiations next year.” (Distr 6 includes Texas.)

    The District 4 statement notes:
    “There are changes in our health care that will result in increased out-of-pocket costs. However, when wages and the company-funded tax-free Healthcare Reimbursement Accounts (HRAs) are factored in, CWA members will be better off, financially, at the end of this round of bargaining than they were at the start.” Do you think this is putting a rosy light on the agreement or is it true?
    The summary doesn’t make clear what happens to new hires, but probably members understand the jargon and acronyms. Seems as if lots and lots of companies have been able to impose 2-tier pay & benefit structures in recent years, with new hires getting a way reduced standard of living. Unfortunately even unionized workers are feeling compelled to accept 2-tier concessions, although they’re usually managing to ameliorate the worst aspects. Even the Lockheed-Martin workers who struck in Fort Worth, with older and newer workers refusing to be divided over these issues, eventually accepted a lesser retirement plan for new workers.

    Texas state employees are in for a similar attack in the next legislative session.

    • A cash balance plan is a defined benefit plan (what I should have said in the article is, “worse than a traditional pension but better than a defined contribution plan) in which an employer sets up a cash balance retirement account for an employee and credits a certain amount of money each year to that account. This is calleda pay credit.At the end of each year, an interest credit is added to the account. The interest credit may be based on the performance of indexed funds or an interest figure established via collective bargaining or some other formula.

      When an employee retires, her annuity is based on the amount in the account rather than on a formula that includes average salary and years of service. In most cases, the annuity for a cash balance pension will be lower than an annuity for a traditional pension.

      The advantage for an employer is that they don’t have to include the amounts in cash balance plans as part of their liabilities on their financial statements.


      • Thanks for your–as usual–clear explanation. At least the retiree gets a guaranteed annuity until she dies. Will this be one of the options considered for the Texas state employee retirement benefit “reform”?

  2. at&t increased my monthly premium for jan 2013 , 13 times what i had paid in 2012. found out the cwa this summer left its retirees out . got a deal for current workers and future workers ,but nothing for us retirees. so now we retirees have a hugh healthcare benefit to pay many like myself will have to drop it,and be forced to obama care at what price who knows. thanks cwa ,and At&t ,thats what you call taking care of your retirees,mainly yourself. rb

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